Korean Shipwreck ICO Under Investigation for Possible Fraud

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A South Korean treasure-hunting company called Shinil Group recently made headlines across the world once they announced an ICO after making the big discovery of a sunken Russiani battleship carrying gold worth $130 billion.

Team members from the company posted a YouTube video on July 16th showing how they were able to allegedly find wreckage of the Dmitrii Donsoki, a Russian cruiser scuttled in 1905 after seeing combat in the Russo-Japanese War. The wreckage was found close to the island of Ulleungdo.

The ship is believed to be full of 5,500 boxes of gold bars and 200 tons of golden coins, with a total value of around $130 billion dollars.

From Shipwreck to Shinil Gold Coin?

Originally, the company said half of the purported gold would be sent back to Russia and 10% would go to help fund tourism on Ulleungdo.

But later, Shinil Group said they would be using the treasure to help launch an ICO. The ICO for ‘Shinil Gold Coin’ was scheduled to commence on July 30th and the actual token was set to be listed on different exchanges in August or September.

Speculation is now rife that the entire thing might be an elaborate scam.

Investigation Intensifies

A number of regulators, researchers, and industry authorities across South Korea have responded to Shinil Group’s claims with a strong dose of skepticism.

Shinil Group said through a statement how they were the “only entity in the world” who have actually found the historical ship. This was disputed by a number of people. The Korea Institute of Ocean Science and Technology told local media they actually found the shipwreck in 2003. Their website featured photos of 2007 of the alleged wreck and location maps.

Shinil Group said the discovery was a different shipwreck. However, the YouTube video posted earlier in the month by the company was not able to be seen as of press time since the uploader had closed their YouTube account. Additionally, South Korea’s Ministry of Maritime Affairs and Fisheries told BBC Korean that Shinil Group did not inform them about the wreck or apply for salvage rights.

Questions have also swirled due to sparse information about any sort of website or social media for Shinil Group. Company spokesperson Park Sung-jin said in mid-July that one site under Shinil Group’s name was not actually affiliated with the company.

The Korea JoongAng Daily said they confirmed the company’s purported address in Singapore was actually used by an unrelated consulting firm.

Seoul’s Gangseo District Police put out a travel ban yesterday for Shinil Group CEO Choi Yong-seok and other members, and are expected to summon the individuals. Korea’s Financial Supervisory Service is now also looking into the company.

Now, the Korea JoongAng Daily says a person known as Yu Ji-beom posted details about the shipwreck on Instagram and a blog, and was in charge of opening a virtual currency exchange called Donskoi International Exchange. The report explains how Yu was “behind the investment scam” and is currently in Vietnam to avoid investigation.